RFID ROI Estimator

An investment into Radio Frequency Identification (RFID) technology solutions can provide retailers with better visibility into their inventory management and loss prevention strategies. However, implementing such technology requires time and resources. Use the ROI Calculator in the below to determine if an investment into RFID tags/labels is the right fit for your organization.

The Sensormatic Solutions RFID ROI Estimator is intended to provide general guidance only. The Estimator is a guide to help you estimate the return from an RFID investment with Sensormatic Solutions. Based on the data you provide, the Estimator helps assess how investing in RFID may impact your bottom line. Some sample presets have been selected to help guide you in this process, you may change these values based upon your own assumptions.

Start by answering a few questions about your scenario. You can then review (and revise if needed) assumptions made by the model, such as the number of times you count inventory each year.

1. Enter Scenario Characteristics

Enter or update the following numbers only for those stores and categories for which you want to calculate your ROI from using RFID:

Please choose your currency

Number of Items to be Sold per Year with RFID Tags

ℹ

Percent of Revenue from Replenished Items like Basics (%)

ℹ

Average Unit Retail (AUR) Price (for items to be tagged) per Year with RFID Tags ($)

ℹ

Average Labor Cost/hr for Store Associates ($)

ℹ

Annual Inventory Turns (for Items to be Tagged)

ℹ

Deployment Timeframe (Number of Quarters)

ℹ

Based on the data you provide, the Estimator helps assess how investing in RFID may impact your bottom line. Some sample presets have been selected to help guide you in this process, you may change these values based upon your own assumptions.

Start by answering a few questions about your scenario. You can then review (and revise if needed) assumptions made by the model, such as the number of times you count inventory each year.

2. Operational Metrics Improvements with RFID

The improvements with RFID shown below are calculated based on our research, your inputs, and industry averages. You may adjust them to fit your unique circumstance. Once entered, proceed to Step 3 Max Budget and Cost Inputs.

Current Performance

Estimated Performance with RFID

Estimated Delta Change

Store-SKU Inventory Accuracy (for Items to be Tagged) (%)

ℹ

							ℹ

							1,000

Current Markdown Percentage (for Items to be Tagged) (%)

ℹ

Blended Gross Margin Percentage (for Items to be Tagged) (%)

ℹ

Current Shrink (Percent of Revenue) (%)

ℹ

Number of Times Store Inventory is Counted Annually

ℹ

							ℹ

							1,000

Labor Hours for Scanning Items during Inventory Counting (hours)

ℹ

Annual Revenue from all Items in this Scenario ($K/Yr)

ℹ

24 K/Yr

ℹ

							→ $1 K/Yr 
							Revenue Uplift due to Elimination of Out-of-Stocks
						

							→$1 K/Yr 
							Revenue Uplift due to Markdown Avoidance
						

3. Max Budget & Cost Inputs for:

Enter or update your minimum acceptable IRR (hurdle rate) and cost input for your scenario.

Hurdle Rate, or Minimum Acceptable IRR (%)

ℹ

Investment Time Horizon

ℹ

Discount Rate (for NPV Calculation) (%)

ℹ

Maximum Initial Deployment Budget ($)

ℹ

Annual Ongoing Budget ($)

ℹ

									
									Deployment Budgets
								
									Maximum Initial Deployment Budget ($)
								
									$1K
								
									Annual Ongoing Budget ($)
								
									$1K
								
									ROI Estimates
								
									Return on Investment (ROI)
								
									ℹ

									90%
								
									Net Present Value (NPV)
								
									ℹ

									$4K
								
									Payback Period
								
									ℹ

									3 years
								
									Initial Cash Investment:
								
									ℹ

									3 years
								
									Cumulative Cash Flow Low Point
								
									ℹ

									$5K

Cash Flow in K$

Cumulative CashFlow

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20

Quarters from Start of Rollout

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